Carmichael Mine Finance Coal
Adani offshore firms’ hidden role in the Carmichael railway
Feb 05, 2025
Climate campaigners block Adani's coal railway in Queensland, Australia, in 2021. The railway's ownership is under scrutiny. Image Anna Brozek @anna.ontheground

Recent analysis shows that the Adani Group’s Australian railway, which transports coal from its infamous Carmichael mine to its Abbot Point coal terminus, is partly owned by companies based in tax havens such as the Cayman Islands and British Virgin Islands through a Singapore firm. This explains contradictory disclosures made by Group flagship, Adani Enterprises, since 2018. It says that the railway is a 'jointly controlled entity' without naming the other partner. It did not disclose the identity of the other 'controlling entity' was until it asked to by a media publication in 2023. Meanwhile, in filings in Singapore it has claimed to be the sole shareholder of the railway.

The Carmichael railway runs through 200 kilometres of the Queensland outback in Australia. It begins at Adani’s Carmichael coal mines in the Galilee basin and ends at Abbot Point, Adani’s port on the Coral Sea. The railway is an integral part of the operation of Adani’s infamous Carmichael mine, moving Adani’s coal to the port, from where it is shipped to global clients, including Adani’s own coal-power plants in India.

Adani's Carmichael railway cuts a swathe through woodlands in Queensland (here shown partially flooded in early 2021).

While the coal and port operations have received international attention for their impact on global carbon emissions and degradation of the Great Barrier Reef, little has been written about this railway. Certainly, its ownership deserves more scrutiny, particularly in light of recent allegations of financial impropriety against the Adani Group and its founder. 

The Adani Group flagship, Adani Enterprises, says in its annual reports that it owns 50% of the railway line and that it’s a ‘jointly controlled entity’ (for example, on page 518 of the latest annual report). But its subsidiary in Singapore, Adani Global Pte, says in its annual financial statements that it owns 100% of the company (Adani Global Resources Pte Ltd) that owns the railway (on p.45 of the Director’s Statement and Audited Financial Statements for the year ended 31 March 2024).

The railway is, in fact, partly owned by companies based in tax havens such as the Cayman Islands and British Virgin Islands through a Singapore firm, Carmichael Rail and Port Singapore Holdings Pte, which until recently was run by Vinod Adani, Gautam Adani’s elusive older brother. Vinod has been named in investigations by Indian law enforcement, short seller Hindenburg Research and the OCCRP, which have accused him of running a galaxy of firms in tax havens which allegedly help the Group park unaccounted money offshore and then invest it in their ventures.

Analysis shows that the contentious Carmichael railway in Queensland, Australia, is part-owned by firms based in tax havens. Image Anna Brozek @anna.ontheground

These offshore firms, through the Singapore firm, have owned 50% of the Carmichael railway project since 2018, a fact that came to light in 2023 following an investigation by the Indian publication The Morning Context. Their ownership, moreover, is in a ‘behind the scenes’ arrangement in the form of a financial instrument called a convertible note. The note grants the Singapore firm the right to receive equity worth 50% of the railway project in 2033, or at any date of its choosing before that. 

Recent disclosures reviewed by AdaniWatch show that the Group has continued with this ownership arrangement, even as it faces heightened scrutiny over its corporate practices, including the use of opaque offshore companies to own key businesses (such as Adani’s entire Indian cement business). Interestingly, the Carmichael railway was originally owned fully by the offshore firms with Vinod Adani still in charge, but Adani Enterprises took over the project in 2017 following criticism of the foreign ownership and its implications for national security and tax revenues in Australia. As the disclosures reveal, this ‘cleaned up’ arrangement lasted barely six months.

(Story continues below)

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Onshore railway, offshore ownership

Adani’s Australian railway enterprise was established in 2011 with the establishment of the Carmichael Rail Network Trust, an Australian trust. The trustee of this entity was a company in turn owned by a firm in Singapore called Carmichael Rail and Port Holdings Singapore Pte, of which Vinod Adani was the sole director. (In 2017, the Australian Broadcasting Corporation investigated these connections) The Singapore firm was in turn owned by Atulya Resources, a Cayman Islands firm, which was owned by British Virgin Islands firm ARFT Holdings. 

No one knows the true owners of these firms, because laws in these tax-haven countries exempt corporations from making their ownership or accounts public (as well as having low or zero taxes, giving them their popular name).

Brave climate campaigners force an Adani coal train to stop, November 2021. Image Ramji @ramji_creations

Such ownership structures result not only in reducing tax paid in the main country of business (in this case, Australia), but also keep the true ownership hidden. While minimising tax through tax-haven entities is a common practice across all major companies in the world, keeping the ownership hidden is not.

The Adani Group has frequently claimed that Vinod Adani does business with the Group independent of his familial connections. The Singapore entity, which is the link between the tax-haven firms, had for many years Vinod Adani as its sole director. Around 2017 and 2018, when Adani’s Carmichael mine was facing increasing scrutiny from activists, politicians and financial experts, Vinod Adani and his companies came under fire for being in charge of the railway.

The railway was asking for AUD $1 billion from the Australian government’s Northern Australia Infrastructure Facility. As Adam Walters, an energy analyst critical of the project told the Australian Broadcasting Corporation in 2017, ‘if I was the Australian Government, and I was considering giving a $1 billion loan to enable a rail project, I would be very concerned by what appears to be a corporate structure that is designed to maximise profits in tax havens and has as a sole director of the intermediate companies, somebody who has been under investigation for very serious financial offences in India.’

Adani Enterprises Limited takes over, then gives away half

In the thick of these accusations, Adani Enterprises acquired the Carmichael Rail Network Trust. The Adani Group – which tends to make big announcements for even its smaller initiatives – never made a statement about acquiring an entire coal-railway project in Australia. It was instead revealed in its annual report for the 2017-18 fiscal year, released in late 2018, that the rail project (ie the Carmichael Rail Network Trust) was acquired on 1 September 2017, through its Singapore subsidiary, Adani Global Pte Ltd (See page 242, Annual report).

Source: Adani Global Pte Ltd, Annual report, 2017-18, p.242

However, the same report also termed Carmichael Rail Network Trust a ‘joint control entity’. 

Source: Adani Enterprises Limited, Annual Report 2017-18, p.152.The key to this puzzle lies in disclosures of the Singapore subsidiary, as well as its subsidiary in Singapore called Adani Global Resources Pte. Adani Global Resources is the holding company of the Carmichael rail network trust. It has issued equity shares with AUD $1000 as face value, all of them to Adani Global Pte, the subsidiary of Adani Enterprises.  (Adani Enterprises has over a hundred subsidiaries in India and abroad, and most of their financial statements are available on its website)

An analysis by AdaniWatch of the disclosures reveals that just a year after Vinod Adani seemingly withdrew from the railway project by resigning the directorship of Carmichael Rail and Port Singapore Holdings Pte, his entities made a secretive reappearance.

In 2018, Adani Global Resources Pte issued a financial instrument called a convertible note to the same firm, Carmichael Rail and Port Singapore Holdings Pte. The note, according to its annual financial statement, said it will issue AUD $1000 worth equity shares to the noteholder at any time of the noteholder’s choosing until 2033. In that year, when the note expires, the equity shares would be automatically allotted. (See page 26 of financial statement available below).

Source: Adani Global Resources Pte Ltd., Directors’ Statement and Audited Financial Statements, 31 August 2017 – 31 March 2018Here is what this implies. Once this option is exercised, or in 2033, AUD $1000 equity shares would be issued by Adani Global Resources Pte to Carmichael Rail and Port Singapore Holdings Pte. Already, A$1000 have been issued to Adani Global Pte, the subsidiary of Adani Enterprises. The total equity shares issued by Adani Global Resources becomes AUD $2000, with Carmichael Rail and Port Singapore Holdings Pte and Adani Global Pte owning AUD $1000 each of the issued equity shares. In this way, the tax-haven firms through Carmichael Rail and Port Singapore Holdings Pte own 50% of Adani Global Resources Pte, and through it the Carmichael Rail Network Trust.

Flow chart indicating lines of ownership, with the dashed line showing the intriguing 'convertible note'.

The financial statement that explained this arrangement did not disclose who the noteholder was.

This disclosure seemingly came only in 2023, in the story published in The Morning Context about this convertible note. In it, the Group spokespeople revealed that the noteholder was Carmichael Rail and Port Holdings Pte, the same Singapore company that originally owned the project and of which Vinod Adani was the sole director. 

The Group described the Singapore firm, Carmichael Rail and Port Singapore Holdings Pte, as a ‘promoter family entity’ and justified this allotment stating that it provided ‘comfort to investors’ that the family had a stake in the project and could be called on to contribute capital to it. 

The arrangement continues

Recent annual reports of the company released in October 2024 for the Indian fiscal year ending March 2024 reveal that the same arrangement continues, in which Adani Enterprises calls the Carmichael rail trust a ‘joint controlled entity’ (page 518, PDF), even as its Singapore subsidiary Adani Global Pte discloses itself as the sole shareholder (page 45). 

This is despite the heightened scrutiny of the company by investors and regulators following Hindenburg Research’s report of January 2023. The only change is that in April 2023, in the aftermath of the report and subsequent investigations by news publications, Vinod Adani resigned as the director of Carmichael Rail and Port Holdings Pte, and was replaced by an official from the Adani family office. 

Although Adani never won the Australian government grant for the project, it raised money from other sources and commissioned the railway line in 2022. Now known as Bravus Rail – after the new name adopted by Adani for its Australian coal operations – it transports coal to Abbot Point and is open to business for other suppliers as well.

The disclosures continue to shed light on the opaque ways in which the Adani Group functions. For example, it shows that Vinod Adani continued to play an important role in the Group’s operations even as the group claimed before Indian courts that he is an independent businessman whose dealings with the group were at arm’s-length. Even though the Group has lately begun describing him as a member of the ‘promoter family’, a legally correct definition that applies to all direct kin of Group chairperson Gautam Adani, the evidence here shows that as well as being a member of the family, Vinod controlled important Australian assets of the Group through offshore channels, at least until 2023. 

Broadly, the manner in which the Carmichael railway ownership structure came into place and how it works is in line with concerns raised by Hindenburg and other critics over the Adani Group’s complex corporate structures, in which it uses tax-haven companies whose true ownership is shrouded in secrecy, and the Group's lack of transparent and timely disclosures. It shows that concerns raised about revenues from the Carmichael project flowing out of Australia and into tax-haven companies continue to be relevant. The concerns will become more pertinent in the future as more Adani coal trains run across Queensland, generating more income for the railway company.